Business stands ready to partner with governments to help deliver the vision of the Paris Agreement. But in order to successfully navigate the potential disruption created by the low-carbon transition, companies need to know that governments have a clear destination.

By steering strongly with loud and clear policy signals, governments can help businesses to fully engage and deliver the scale and speed of decarbonization needed to limit global warming to well below 2 degrees Celsius.

One of these clear policy signals came to the fore last month in Bonn, Germany, during the annual gathering of policymakers, forward-looking companies and non-state actors known as the Conference of the Parties (COP23). 

At COP23, the U.K. and Canadian governments launched the Powering Past Coal Alliance. Bringing together a group of more than 25 countries, states and regions, this alliance sends a powerful message that coal’s time has passed.

The declaration stated (PDF) that the health effects of air pollution from burning coal, including respiratory diseases and premature deaths, impose massive costs in both human and economic terms. Recent analysis has found that more than 800,000 people die annually around the world from the pollution generated by burning coal. One U.K. study found that deaths related to emissions from coal cost the country’s economy between $2.91 billion and $8.42 billion in a single year.

Now is the time for business to harness the level of ambition shown by governments, to drive real change in the global economy, protect the health of vulnerable people and limit global warming. The alliance invites companies to sign the Powering Past Coal Declaration, which supports governments with a commitment to powering their operations without coal.

100 percent renewable

Many forward-looking businesses already embrace the shift away from coal and other fossil fuels, by committing to shift to 100 percent renewable power. The RE100, a partnership between The Climate Group and CDP, is a collaborative global initiative uniting more than 118 influential businesses committed to 100 percent renewable electricity.

Together, they are creating more than 155 terawatt-hours (TWh) in demand for renewable electricity annually — about as much as it takes to power Malaysia.

Companies such as Apple, BMW, BT, Coca-Cola European Partners, General Motors, Microsoft Corporation, Google and Unilever have committed to going 100 percent renewable and it’s proving to be good for business. These companies are part of a group that outperformed companies in the Bloomberg World Index by 9.6 percent and the Dow Jones Sustainability World Index by 19.6 percent, according to CDP data. 

"Electricity costs are one of the largest components of our operating expenses at our data centers and having a long-term stable cost of renewable power provides protection against price swings in energy," said Urs Hölzle, senior vice president of technical infrastructure at Google.

Now is the time for business to harness the level of ambition shown by governments, to drive real change in the global economy.

Many of these companies are looking beyond their own operations and actively helping to push the global market for renewables forward. For example, HSBC recently announced it will provide $100 billion in sustainable financing and investment by 2025, while also committing to reduce exposure to thermal coal and transition to 100 percent renewable electricity.

"We plan on working closely with RE100, other corporates, governments and regulators to open up renewable energy markets and support the decentralization of power generation across our operational centers," said Andy Maguire, group chief operating officer at HSBC Holdings. "This will enable HSBC and other corporates to develop PPAs globally and support the transition to a low-carbon economy and 2-degree world."

Meanwhile, leading utilities such as EDP and ENEL have set science-based targets to help transform energy markets and deliver their corporate strategies. 

"Enel’s engagement in climate action is an integral part of the group’s business strategy, as shown by our pledge to become CO2-free by 2050 and our focus on the group’s renewable growth," said Enel Group CEO Francesco Starace.

A just transition 

Such collaboration between government and business can be a force for real and positive change. But as the transition away from coal gathers pace, it’s vital to ensure that workers' rights are protected.

Companies increasingly see the need to consider the rights of workers in the energy transition. Those who do not risk facing the growing economic headwinds that often accompany higher unemployment, such as increased taxes and stagnating growth. 

"Part of this just transition is to invest more money in stimulating the right transition," said Paul Polman, Unilever CEO and a leader of the B Team, a global nonprofit that brings businesses together to collaborate on social and economic good.

Following the launch of the alliance, B-Team leader and General Secretary of the International Trade Union Confederation Sharan Burrow said the transition needs to secure decent, low-emission jobs while upholding rights, protecting vulnerable workers and communities and leaving no one behind.